Unilever to separate spreads business to give brands more 'focus'

Unilever is set to create a standalone unit for its spreads business called 'Unilever Baking, Cooking and Spreading' in order to give the brands across its portfolio more focus.

Unilever: set to create a standalone business unit for its spreads brands, which includes Flora
Unilever: set to create a standalone business unit for its spreads brands, which includes Flora

Unilever said it would establish a standalone unit for its North American and European spreads business after being hit by a drop in margarine consumption. It hopes the move will let the business have more ‘freedom’ to take strategic decisions and ‘radical’ action where necessary.

CFO Jean-Marc Huet said today in an investors presentation that spinning-off spreads into a separate unit would increase speed of business execution for the brands in the category, which include Flora.

The standalone business will have full responsibility for strategy, planning and performance and will be led by Sean Gogarty, SVP Spreads. The new unit is set to be operational from July 2015.

Shares in the business jumped off the back of the news this morning.

Speculation that the business would sell the spreads business, which accounts for 7% of Unilever’s turnover, came as Huet admitted the category had been a "significant drag" on its overall foods business, thanks to periods of low growth and, at times, sales decline.

However, Unilever hit back at the specuation and said it was not planning to sell its spreads business. 

A spokeswoman told Marketing that the proposed changes to the business aimed to accelerate the transformation of the category and return it to growth.

"It remains a core part of our business. This proposal is all about reigniting the growth of our Spreads business to drive Unilever’s long term success," she said.

"We are confident that this approach will provide the focus and speed needed to improve delivery whilst retaining the benefits of Unilever’s scale.

"Overall our intention is to improve the competitiveness of our Spreads unit with sharper accountabilities and more focussed decision making. 

She added: "We already take different approaches for different businesses, with examples including Ben & Jerry’s ice cream, our Food Solutions catering business and our Premium Personal Care division. In an increasingly challenging world, this flexibility in business models is needed more than ever."

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